2006 telephone tax refund

OK, so I generally don’t post about tax stuff on this blog but I’m making an exception. If I’ve gotten one, I’ve gotten 20 phone calls or emails in the last day or so about the Telephone Tax Refund that will be on the 2006 tax returns. I actually wrote about this briefly back in August but it seems no one was paying attention back then (The Yahoo link in the original post isn’t working. This one is close.)

In any case, we now have all of the details. Everyone will get this credit, based on the number of exemptions on your tax return. The standard amounts:

• one exemption, the standard refund amount is: $30
• two exemptions, the standard refund amount is: $40
• three exemptions, the standard refund amount is: $50
• four exemptions or more, the standard refund amount is: $60

Now, if you actually want to claim more than that, pull together 41 months (the IRS will refund to you the taxes on long-distance service billed to you for the period after Feb 28, 2003 and before Aug 1, 2006) of phone bills and fill out form 8913. Attach that to your return instead.

In my earlier post, I decried the use of the tax return for refunding this money, because I was concerned that those who are not required to file would not get the refund. As it turns out, even those not required to file a tax return can get this refund by using form 1040EZ-T.

By the way – the IRS says that the government will pay out $10 billion as the result of this refund. Sounds like a lot, til you realize that collections were $6 billion a year for a number of years.